Item 1.01 Entry into a Material Definitive Agreement.
The information required by this Item 1.01 is included in Item 2.03 and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Senior Unsecured Revolving Credit Facility
On July 15, 2022, TPG Operating Group II, L.P. (“TPG Operating Group II”), TPG Operating Group I, L.P. (“TPG Operating Group I”), TPG Holdings II Sub, L.P. (“Holdings II Sub”) and TPG Operating Group III, L.P. (“TPG Operating Group III”, and together with TPG Operating Group II, TPG Operating Group I and Holdings II Sub, the “Co-Borrowers”), each as co-borrowers, entered into an amended and restated revolving credit facility (the “Senior Unsecured Revolving Credit Facility”) with Bank of America, N.A. as administrative agent, and the lenders party thereto.
The Senior Unsecured Revolving Credit Facility amends and restates the existing revolving credit facility entered into on January 1, 2012 and as most recently amended and restated pursuant to the Fourth Amendment Agreement dated as of November 19, 2021. TPG Operating Group II and the other Co-Borrowers are indirect subsidiaries of TPG Inc.
The Senior Unsecured Revolving Credit Facility, among other things, (i) extends the maturity date of the revolving credit facility from November 12, 2025 to July 15, 2027, (ii) increases the aggregate revolving commitments thereunder from $300 million to $700 million and (iii) replaces the London Interbank Offered Rate (“LIBOR”) as the applicable reference rate with the Secured Overnight Financing Rate (“SOFR”), and otherwise conforms the credit facility to accommodate SOFR as the reference rate.
Dollar-denominated principal amounts outstanding under the Senior Unsecured Revolving Credit Facility accrue interest, at the option of the applicable borrower, either (i) at a base rate plus applicable margin not to exceed 0.250% per annum or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin not to exceed 1.250%. Euro-denominated principal amounts outstanding under the Senior Unsecured Revolving Credit Facility accrue interest at a Euro Interbank Offered Rate (“EURIBOR”) rate plus an applicable margin not to exceed 1.250%. Sterling-denominated principal amounts outstanding under the Senior Unsecured Revolving Credit Facility accrue interest at a Sterling Overnight Index Average (“SONIA”) rate plus an applicable margin not to exceed 1.250%. TPG Operating Group II is also required to pay a quarterly commitment fee on the unused commitments under the Senior Unsecured Revolving Credit Facility not to exceed 0.150% per annum, as well as certain customary fees for any issued letters of credit.
The Senior Unsecured Revolving Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of fee generating assets under management, each tested quarterly.
The preceding is a summary of terms of the Senior Unsecured Revolving Credit Facility and is qualified in its entirety by reference to the Fifth Amended and Restated Credit Agreement dated as of July 15, 2022, among the Co-Borrowers, Bank of America, N.A. as administrative agent and the lenders party thereto, attached as Exhibit 10.1 to this report, which is incorporated herein by reference as though it was fully set forth herein.
Senior Unsecured Term Loan Agreement
On July 15, 2022, TPG Operating Group II, as borrower, and TPG Operating Group I, Holdings II Sub and TPG Operating Group III, each as guarantors, entered into an amended and restated term loan agreement (the “Senior Unsecured Term Loan Agreement”) with Wells Fargo Bank, N.A. as administrative agent, and the lenders party thereto.
The Senior Unsecured Term Loan Agreement amends and restates the existing term loan agreement entered into on December 2, 2021.
The Senior Unsecured Term Loan Agreement, among other things, replaces LIBOR as the applicable reference rate with SOFR, and otherwise conforms the term loan agreement to accommodate SOFR as the reference rate.
Principal amounts outstanding under the Senior Unsecured Term Loan Agreement accrue interest, at the option of the borrower, either (i) at a base rate plus an applicable margin of 0.00% or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin of 1.00%.
The Senior Unsecured Term Loan Agreement contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of fee generating assets under management, each tested quarterly.
The preceding is a summary of terms of the Senior Unsecured Term Loan Agreement and is qualified in its entirety by reference to the Amended and Restated Credit Agreement dated as of July 15, 2022, among TPG Operating Group II, as borrower, TPG Operating Group I, Holdings II Sub, TPG Operating Group III, each as guarantors, Wells Fargo Bank, N.A. as administrative agent and the lenders party thereto, attached as Exhibit 10.2 to this report, which is incorporated herein by reference as though it was fully set forth herein.
